MALABO, Feb 3 (Reuters) - African oil and gas producer
Equatorial Guinea said on Monday it would allocate $1 billion
over three years to support foreign investment aimed at
diversifying its energy-dependent economy into new areas, such
as farming, petrochemicals and mining.

President Teodoro Obiang Nguema's government announced the
co-investment fund of 500 billion CFA francs ($1 billion) as it
hosted a two-day conference in Malabo showcasing opportunities
for foreign investors in sectors beyond oil and gas.

Announcing the investment fund, Finance Minister Marcelino
Owono Edu said the fund would make investments with private
partners in non-energy sectors where the government wanted to
attract capital. These included agriculture and ranching,
fisheries, petrochemicals and mining, tourism and financial
services.

A new state entity, to be called Holdings Equatorial Guinea
2020, would help to guide the state's diversification effort.

"Equatorial Guinea is today a fertile ground for private
investment," President Obiang told the conference, saying the
diversification drive marked the next phase in the country's
"Horizon 2020" national development plan. Oil and gas currently
account for the bulk of the country's GDP and state revenues.

Obiang, Africa's longest serving leader, has ruled the small
former Spanish colony in Central Africa since 1979, when he
ousted his uncle, the feared dictator Francisco Macias Nguema,
in a coup. Obiang installed a multiparty system in which his
ruling PDGE party has dominated all elections.

With a tiny population of around 735,000, Equatorial Guinea
started producing crude in the mid-1990s and has become Africa's
No. 3 energy producer after Nigeria and Angola. The capital,
Malabo, sits on Bioko Island off Cameroon while the mainland Rio
Muñi segment lies between Cameroon and Gabon.

But although Equatorial Guinea boasts Africa's highest gross
domestic product per capita - even beating some southern
European countries on that measure - international development
organisations say more than half of its population still live in
poverty.

Stung by international criticism that it has not used its
hydrocarbon wealth enough to raise the living standards of its
population as a whole, Obiang's government is now seeking to woo
wider foreign investment outside the dominant oil and gas
industry to create more sustainable long-term growth and jobs.

"Equatorial Guinea is a secure and profitable destination
for your money, it is your gateway to Central Africa," Edu told
business executives at the conference. He presented his country
as a potential base for cross-border investments into the CEMAC
Central African regional grouping that includes other oil
producers Gabon, Congo Republic and Chad. The CEMAC region uses
the CFA franc, which is pegged to the euro.

CALL FOR MORE TRANSPARENCY

Despite rapid economic growth rates over the last two
decades that has seen ports, airports and roads built across the
country - many by Chinese companies - rights groups and
transparency advocates say Equatorial Guinea's government has
failed to match these infrastructure advances with social
investments, anti-corruption measures and improved governance.

Calling for more spending in education and health, former
International Monetary Fund (IMF) Managing Director Rodrigo
Rato, one of the invited speakers at the Malabo conference, also
urged the government to improve its public accounting.

"Equatorial Guinea needs to make transparency efforts," he
said.

The finance minister said 35 percent of the government's
2014 budget was earmarked for social spending, compared with 13
percent in 2013. He and other government ministers complained
that international bodies such as the IMF had failed to fully
recognise all of the country's improvements over the last decade
because they used outdated statistics and information.

"Our biggest mistake is that our statistics, and what we've
been doing on the health front, have not been well publicised,"
Gabriel Mbega Obiang Lima, Mining, Industry and Energy Minister
and one of the president's sons, told reporters in a briefing.

He had earlier outlined opportunities for investors in the
potential production of petrochemicals as well as in the mining
and processing of deposits of bauxite, iron ore and coltan, the
latter to be used in electronics manufacturing.

Mining Minister Obiang said Equatorial Guinea was ready to
build processing zones and provide cheap electricity from its
ample gas reserves to support foreign mining ventures.

"We are not going to let the investor take all the risks,"
he said.
(Editing by Clive McKeef, G Crosse)